With the COVID-19 pandemic resulting in business closures across British Columbia (BC), both the BC and federal governments are taking steps, including those to address real estate-related concerns, to support businesses struggling with the economic fallout of COVID-19. Below is a roundup of these recent real estate developments relating to COVID-19 that are of relevance to businesses in BC.

Reduction of School Tax Rates for Commercial Properties

On March 23, 2020, the BC government introduced its $5 billion COVID-19 Action Plan, which includes a real estate tax reduction for businesses. Specifically, the BC government announced a reduction to the provincial school property tax rate for commercial properties (Classes 4, 5, and 6) by 50% for the 2020 tax year.1 It is anticipated that this reduction will provide $500 million in immediate relief for businesses that own their property and will allow commercial landlords to pass these savings onto their tenants in triple-net leases.2

Reduction of Commercial Property Tax Bills

On April 16, 2020, the BC government announced that it is "providing further support by making additional temporary property tax changes to provide province-wide relief for business and local governments."4 Specifically, the BC government introduced a further reduction to the provincial school property tax rate for commercial properties to achieve an average 25% reduction in the total property tax bill for most businesses.5 This new reduction enhances the previously announced 50% reduction to the provincial school property tax rate, discussed above.

Additionally, the BC government postponed the date that late payment penalties apply for commercial properties in Classes 4, 5, 6, 7, and 8 to October 1, 2020.6 This postponement will provide businesses and landlords with more time to pay their reduced property tax, without penalty.

Canada Emergency Commercial Rent Assistance

On April 16, 2020, Prime Minister Justin Trudeau unveiled the Canada Emergency Commercial Rent Assistance program. The program is intended to provide rent support to small and medium-sized businesses that have been impacted by COVID-19 for the months of April, May, and June 2020.7 The federal government will be working closely with the provincial governments to bring the program to fruition. Additionally, the Minister of Finance, Bill Morneau, stated that the federal government would be offering loans, including forgivable loans, to commercial landlords who offer rent reductions to businesses across Canada. Further details on the program are anticipated in the upcoming days.

The Cassels Real Estate Group is continuing to monitor the developments relating to COVID-19 that impact businesses and will provide updates as they become available.

Additional resources related to the impact of the COVID-19 pandemic can be found here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Footnotes

1. Government of British Columbia, "COVID-19 Action Plan: BC's first steps to support people, businesses" (March 23, 2020), BC Government (website), online: https://news.gov.bc.ca/releases/2020PREM0013-000545.
2.Ibid.
3.Government of British Columbia, "New COVID-19 supports for businesses, local governments" (April 16, 2020), BC Government (website), online: https://news.gov.bc.ca/releases/2020FIN0020-000703.
4.Ibid.
5.Ibid.
6.Kerri Breen, "Coronavirus: Trudeau promises rent relief for small and medium-sized businesses" (April 16, 2020), Global News (website), online: https://globalnews.ca/news/6826484/coronavirus-trudeau-business-rent/.
7.Ibid.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.